Alibaba and K+N sign logistics MoU

Alibaba founder and Executive Chairman Jack Ma envisions a world without barriers to cross-border e-commerce.

Today, the world’s second largest air freight forwarder by volume, Switzerland-based Kuehne + Nagel, signed an MoU to offer outbound logistics services to shippers listed on China’s largest business-to-business platform, Alibaba.com.

The MoU will expand the scope of a pilot program launched last year which integrated the forwarder’s “KN FreightNet” digital shipment manager with Alibaba.com. Initially, the partnership allowed paid Alibaba members to instantly quote and book point-to-point air freight consignments. This was later expanded to offer Less-than-container (LCL) consignments as well. Today’s MoU outlines K+N’s intent to offer Alibaba.com customers access to its entire portfolio of intermodal logistics solutions including “air, sea, rail, overland, and contract logistics outside of China.”

When attempting to couple e-commerce with air freight, business-to-consumer (B2C) transactions and express parcels are the most visible link. Less obvious however, are the vast number of business-to-business shipments that move as general freight. After all, just like bricks-and-mortar retailers need to stock their warehouses and distribution centers that ultimately deliver stock to retail stores, e-tailers need to do the same as an intermediate step to last-mile order fulfillment. Additionally, businesses of all sizes rely on wholesalers to supply merchandise, spare parts and promotional items. Adding a layer of transparency in price and shipping speed to the B2B process will likely make services like Alibaba.com of greater appeal to international businesses.

What the K+N alliance with Alibaba.com means for other forwarders vying to handle outbound shipments from China is also unclear. Earlier this year, freight forwarding network World Cargo Alliance (WCA) announced its intent to collaborate with Alibaba.com to support cross-border shipments via WCA’s network of 6,300 small- and medium-sized enterprise (SME) forwarders. WCA said it would vet and approve international logistics providers for quality and efficiency in logistics services for the customers of Alibaba. Approved providers would then have full access to compete for logistics orders generated on the Alibaba.com platform, perhaps going head-to-head with K+N.

Now that Alibaba.com has aligned with Kuehne + Nagel, we cannot help but speculate the likeliness of a similar tie-up between DHL Express and Amazon. Starting next month, DHL will handle sortation for Amazon Prime Air at Cincinnati/Northern Kentuck Airport, future home of Amazon’s main air hub. And given that DHL is already well-rehearsed in moving general and express cargo between the US and Asia and the US and Europe, it might be a good fit for Amazon’s operations on those to continents.